Consultation guidance

1. Background
 
Council Tax Reduction (CTR) is a means-tested discount to help people on low incomes pay their Council Tax. It is a local scheme run by South Northamptonshire Council that replaced Council Tax Benefit. No money is paid to the people who claim it. Instead, we reduce their Council Tax bill by the amount of support they are entitled to.

On 1 April 2013 central Government ended the national Council Tax Benefit Scheme and gave responsibility for designing and administering CTR to Local Authorities. At the same time, the Government made Local Authorities responsible for funding CTR, but reduced the finance available by 10%. For South Northamptonshire this is a reduction in funding of approximately £370,000 which is shared with the Northamptonshire County Council and the Police and Crime Commissioner. 

Our current Council Tax Reduction Scheme broadly follows the principles and rules that applied to Council Tax Benefit and has been largely unchanged since its introduction on 1 April 2013. Council Tax discounts and exemptions have also remained the same.

Under the current scheme, everybody of working age who receives CTR must pay a contribution of 8.5% towards their Council Tax bill. This means the maximum support working age applicants can receive is 91.5% of their Council Tax bill. Pension-age applicants continue to receive up to 100% support. Currently around 3296 households claim CTR. Of these approximately 1400 are of working age.

2.  Why are we carrying out consultation?

Each year the Council is required to formally adopt a scheme by 31st January to commence on the 1st April of that year. Councils across the Country are developing proposals for the 2017-2018 scheme. 

South Northamptonshire Council is currently considering options for funding their Council Tax Reduction scheme for 2017-2018 taking into account the reduction in central government funding and also the need to protect some of the most vulnerable residents in the district.  

3. Options
 
To meet some of the funding gap by continuing to reduce the level of financial support given to all working age households to a maximum of 91.5% (so all working age households pay a minimum of 8.5% of their Council Tax).
 
To increase Council Tax to meet the funding gap. The Council strives to find a fair balance to support all residents and aims to keep tax rises low. We may be required to conduct a referendum if a proposed tax increase is above a certain limit. 
 
To reduce funding available for other council services.  As an alternative to reducing financial support for working age households under the Council Tax Reduction scheme South Northamptonshire Council could cut spending in other areas. As the Council seeks to maintain the level of local services to our residents this is not considered a favourable solution.

Use of financial reserves. An option could be to use resources for a limited time to fund part of the cost of the Council Tax Reduction Scheme. However this is not a viable long term solution.  

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